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R O A D MA P TO CHANGE V-Engineering concept overview BUSINESS BASIS The movement of vending transactions from a basic form of (backward) commerce to the implementation of ecommerce is being transformed through customer-to-operator interactiv- ity known as "we-commerce." "We-commerce" is an innova- tive business model in which the end-user (consumer) and service provider (vending operator) engage in a work- ing relationship (promotions, rewards, geo-location, etc.), including customer relationship management (CRM). USER INTERFACE The consumer experience at a vending machine has long involved the use of a glassfront or solid static media. The ad- vent and application of screens from a few inches to a couple of feet will soon evolve into innovative transparent displays that enable the facing to be a translucent touchscreen (both transparent and opaque), de- pending on the positioning of the consumer. The consumer is able to see the products in the machine while digital content simultaneously appears on the machine front panel. PROMOTIONS The movement from cling-ons to digital signage represents a major upgrading in a user interface historically built on static promotions. As digital signage gains traction in the vending industry, the next step will be to identify the physical attributes of the consumer and to promote those items con- sidered most appealing based on gender, age, location, and day part. C ONT INUED ▶ improving productivity as more products will be handled each machine visit, thereby lowering the cost per product replenish- ment expense. • Data mining – Having more and better information about products with complementary sale potential (i.e., identifi ca- tion of which products sell well together) ensures machine menus have optimal sales mix derived from an analysis of mul- tiple product purchases and/or bundled purchase promotions. Altering the retail sequence in vending to closely parallel tradi- tional retail shopping will contrib- ute to additional advancements by providing a pathway for changing the consumer's vending experience. Digital media evolves An increased level of interactivity between the consumer and digital media in most retail environments has been proven to effectively increase traffi c, sales, profi ts and loyalty. The recent implementations of video screens and digital signage have been proven to positively impact customer purchase behavior at the point of sale (POS). Digital signage is typically defi ned as high defi nition content containing text, graphic, and video components. As a result of advance- ment in video distribution and display technologies, digital signage is becoming a point of emphasis for self-service providers, including vending operators. The fact that a video presentation screen can also serve as a touchscreen input device makes applications even more relevant by providing a plat- form for promotional upselling to an already engaged customer. The real opportunity for the vending channel may lie in the fact that this roadmap element has the potential for mer- chandising products in the machine 50 Automatic Merchandiser VendingMarketWatch.com May 2012 as well as revenue sharing from sale- able advertising spots. Digital media, expected to become an integral part of the vend- ing landscape, is currently available from machine manufacturers and industry technology suppliers for new machines as well as retrofi table for older models. Screens can range from single-line LED display to a medium-sized LCD screen to a large touchscreen design. Despite the richness of data that can be displayed and captured by an LCD unit, it likely will be the paid advertising model, implemented so successfully at other retail locations (e.g., post offi ces, gas stations, and quick service eateries) that will serve as an adoption motivator for the vending industry. The fact is incremental revenue, derived from digital broadcasting, can make a signifi cant contribution to profi tability. A second motivator is likely to be in response to impend- ing government regulations mandat- ing the disclosure of nutrient and ingredient product information. Digital user interface Similar to the objectives of other forms of media campaigns, vending machine-based digital programming should strive for three goals: 1) infl uencing a POS purchase deci- sion (promotional), 2) extending brand image (informational), and 3) enhancing the customer experience (entertainment). From an opera- tional perspective, digital media is very appealing as it enables instant updating of product availability, pric- ing, descriptors, add-ons, modifi ers, nutritional and ingredient informa- tion, as well as upselling opportuni- ties (bundling and coupling). Vending operators can use digital media in an attempt to increase revenues while enhancing the consumer experience by deliver- C ONT INUED ▶